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This is the Real Estate Shop where each episode will bring you a top industry expert to share their

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current programs or projects that are making an impact in our communities today. Be sure to check

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us out on Spotify and Apple podcasts. Welcome to the Real Estate Shop. Today we have guests

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representing the city of Pittsburgh, Derek Tillman from Bridge the Gap Development and Sabrina

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Miller representing the Uptown Hill District. Kicking things off, we'll start with Derek. Derek,

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tell us about your background and how you transitioned into your current role.

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Sure, sure. So thanks again Stephen, Kervin for inviting us to join you today.

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As you said, Derek Tillman, President and CEO of Bridge in the Gap Development. We're a real

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estate development firm founded in 2006 and my journey to this point has been, so I actually

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graduated from University of Pittsburgh in 2004 and upon graduating I couldn't find a job,

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graduated with a degree in information science and it was discouraging, a very discouraging

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moment, but while in college I was in a leadership development program called Coral Center for Civic

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Leadership. While in that program we met a lot of different leaders throughout the city and different

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sectors, education, government, business, etc. And one particular gentleman took a liking to me,

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we developed a relationship, he later became my mentor. So I reached out to him, his name was Gray

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and just talked about my frustration after graduating, growing up in Section A housing,

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really feeling like this, things would get easier with a full-time employment.

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So talking about my frustration, he said, you know what, I'm going to help you. So he set up some mock

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interviews with him and some of his friends and colleagues in different industries and the thought

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was that, you know, I can get some feedback, you know, kind of during these mock interviews and

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potentially opportunity will come from it. So we did that, I met some great people, but ultimately

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at the end of it I was unemployed. So Gray said, you know what, I'm gonna allow you to come work

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for me. So my first job actually out of college was working for Gray, he was a retired corporate

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executive from Equitable Gas and also had a small real estate company with him and his son. So I

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went to work for him, helped him with a lot of board work, non-profit boards, for-profit boards

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that he was on and he had a small real estate portfolio of non-performing assets, basically

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vacant properties. So I served as this project manager to get those properties back up and

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running, helped hire the subcontractors, managed the projects, but then I also did the property

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management on a backend, that was one of my earliest experiences. I got my real estate license

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also shortly thereafter and I started to sell real estate, really kind of developed the

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investor niche, worked with a lot of first-time home buyers, but also

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a lot of investors locally, nationally, ballplayers, etc. And I was learning a lot from my clients,

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kind of what they were doing right, what they were doing wrong, how they were structuring deals,

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how they were getting money, how they were getting financed, and you know just became a point of

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learning. I bought my first property and you know it was really intended to be a flip,

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but it didn't sell. And again, another discouraging moment, but learned a lot throughout the process.

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Fast forward, after buying that property, I basically couldn't go back to the bank to get

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money to do another one, so I went back to Greg and said, you know what, how about we come together

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and take this to the next level. He said, let's do it. So we co-founded Bridging the Gap

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in 2006. We bought two more properties together, one we sold, one we rented, and I really saw this

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as the pathway towards growth. I wasn't really thinking development, I was just trying to be a

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real estate investor. In 2007, an opportunity landed in his lot to own a restaurant at the

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Pittsburgh International Airport. Neither one of us had restaurant experience and he asked, hey,

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you want to be a part of it? I said, yes, I'm going to be a part of it. He said, okay,

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absolutely. And I saw this as another pathway to also invest in real estate. So we took that over,

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we hired our own restaurant manager, and here we are off to this journey. I helped negotiate our

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commercial lease with the airport authority. There was a union, so we negotiated a union contract,

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a lot of great experience. 2008, there was a recession. President Obama got into office and

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there was an opportunity to do weatherization, the process of making homes more energy efficient.

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So I branched out from Greg, started a weatherization company with another gentleman

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from my church. And basically, we took a $40,000 investment, built it into a million dollar

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business in the first year, a multimillion dollar business over the next few years.

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I started around 2012, we started to not see eye to eye with my partner and decided to sell my

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interest. But prior to that, I got married in 2009 and we were investing heavily in real estate

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because weatherization was so profitable. We're buying properties cash, doing some owner finance

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and built a pretty sizable portfolio. When I exited the weatherization company,

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I also, we bought a 20 unit. So basically around 2013, I came to a crossroads and it was like,

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all right, do we build this company into a couple hundred units, maybe a couple thousand units,

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cruise off into the sunset or go into this heavily political world of development?

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And what really helped me make that decision was I thought back to my childhood, growing up,

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in section A housing, moving a lot all over the city, being displaced by landlords, seeing

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developers come into our community and not really respect the community or the people that live

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there, seeing family members displaced, as well as, you know, just all the professional experience

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I had had, had had up to this point in selling residential, also sold commercial real estate

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somewhere along this journey. Weatherization, I had rehabbed close to a hundred units at this point.

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You know, just all these collective experiences, I knew between that and also the opportunities

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that I could create will be a lot more than I could just being basically a large landlord.

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So it became clear to me that I was to go into development because I could serve more than just

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me, my wife and a few subcontractors. So it became more of a calling. And that's how we got to where

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we are today.

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Wow, man, a lot to unpack there and a lot of lessons along the way. The value of mentors

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and relationships, that knack for just making a decision and figuring it out, like the airport

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situation, just like went for it. So that's good stuff. Really appreciate that.

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Sabrina, we'll switch to you. Tell us a little bit about your background and how you actually

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started out and got to the point of where you are now.

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Sure. So I'm Sabrina Miller. I'm the real estate and development program manager with Uptown

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Partners. So I've been in the state of Pittsburgh for six years as of this past January. And

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how I ended up here and the journey to where I am now is I think is an interesting path. So I'm a

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transplant from Detroit, Michigan. And following my college years, I knew that I wanted to go into

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public service and I didn't know what that looks like. I had explored the Peace Corps and then I

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finally landed on what could be referred to as domestic Peace Corps, AmeriCorps. And so I came

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to Pittsburgh to do the state and national branch and I did that for six months and realized that's

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not what I want to do. That's not how I want to give back. It didn't feel like me. And so I

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became a member of AmeriCorps VISTA, which their programming and they place people in spaces where

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we can affect some change with regard to economic development. And that was a really interesting

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effect. Some change with regard to economic development. And that was where I was like,

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this is how I give back. So I was at an organization called Pittsburgh Community

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Reinvestment Group and they had tasked me with writing a best practices guide for

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the Pennsylvania Abandoned and Blighted Property Conservatorship Act, more commonly known as

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conservatorship. And essentially that is a program for helping individuals, community groups,

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municipalities, et cetera, now land banks, identify blighted and abandoned structures and

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put them into productive reuse. So I ended up realizing that there were no best practices for

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that at the time and ended up writing a publication that went statewide about its use, some narratives,

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some examples, some wins and resources and then specifically, which I still focus on to this day,

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is policy recommendations. And once that was over, that year of service was over, I got into

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community development with some nonprofit boards in my neighborhood and was continuing to pro bono

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consult municipalities and community groups around conservatorship and how to use it.

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And then in 2020, ended up starting a company, a residential contracting company. And

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the following year I decided that I wanted to get involved in community development from a

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legislative side and decided to run for council. In that same year, I realized I really want to

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do this, work with the team and have some greater and focused impact. And I knew I wanted to go back

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to work full time in addition to the other endeavors I had embarked on and

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ended up applying for this role with Uptown Partners as the real estate and development

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program manager and came onto the organization in June of 2021. And in this role, I essentially

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manage the built and unbuilt environment, both private and public and identify opportunities

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and creative ways to address challenges with regard to real estate and development.

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In the Uptown neighborhood of Pittsburgh. Got it. That sounds good. So,

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Kerber, you want to take it from here? Yeah. Sabrina was telling Derek that my wife is from

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Pittsburgh. She's from Pent Hills. And when we were dating, it was like we're in Pittsburgh every

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other month. So I got a good chance to explore the neighborhoods and to kind of see how it has

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evolved over the past, I would say, 12 to 15 years. And I think that's what I've been doing

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years, particularly around, you know, the Hill District and Homewood. So it's amazing to watch.

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Now, given the development that's happened, how many of that is being, how much participation is

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being represented by minorities in Pittsburgh? Do you have a sense of what it's like? Is this a

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question for me or Derek? Or both, if either of you have an answer, some thoughts around it? Sure. I

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mean, I can speak from the Uptown perspective right now. We're seeing the neighborhood is like,

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I would estimate around like 1.5 rectangular mile. So it's a small neighborhood amongst the collection

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of neighborhoods that make up the Hill District. But in Uptown alone, we have six large scale

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developments that are black lit, which is exciting. And I've been asked the question quite a bit.

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I'm like, how did that come about? How did you facilitate that? And I really did not facilitate

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that. And I think this is a proper, it's just a unique opportunity. Uptown has been overlooked

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for quite some time. And we have some amazing incentives. It's a key location. And I think that

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this is a perfect opportunity to have Derek kind of speak to that as one of those six

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black developers who are leading large scale development in the Uptown neighborhood.

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Before Derek jumped in, Sabrina, do you mean explaining like how close Uptown Hill District

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is to downtown and what that area looks like? So people can visualize it.

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Yeah. So Uptown is the connector. Some people have been calling it a pathway to progress or

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of progress. And it is situated between downtown and Oakland and also about two minutes from the

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Southside. So it's that puzzle piece that's being, you know, finally is being put into place to

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create that Uptown or downtown, Uptown Oakland District. So yeah. What's the demographics like?

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If you exclude the Allianz County Jail and Duquesne University, we do have about an even split. So

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sometimes it teeters. It's about 49% black and 51% white the last time I checked. So it's a pretty

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even split. Yeah. And I would just say, you know, there are unique neighborhoods like Uptown

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where you're seeing black developers, minority developers participating more.

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And, but most of the city is not being done or there's not much participation from black

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developers. In other communities where you have seen things include Larmer, the Hill District.

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And I think one development was done by a black developer in Homewood. But again, primarily

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it is not being done by us, but there are really developer friendly neighborhoods and communities

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where I would definitely include Uptown is probably number one. And the Hill District has

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had times when it was, I guess, more friendly to developers and other times when it wasn't. So it's

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somewhat, it almost depends on the time, but you know, we're here. We continue to make our presence

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felt and continue to move forward despite the challenges that exist. Wow. So that's like seven

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black led developments. How much other development is going on within, I guess, just within that

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district? Most of the neighborhoods, seven would be black led. And I think that's the

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most neighborhoods, seven would be pretty much like amazing. But apparently there's more development

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than just that, or it's pretty much all the development being done right now, large development

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being done by black developers in that district. Yeah. So in Uptown right now, I am very proud to

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say that I've worked on, provided letters of support, or been closely tied with developers

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from the conceptual stage through, were they getting to the point where they are getting their

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planning approvals. And so right now I'm working on about 16 different developments. And they range

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from small scale, mixed use development, like one occupant and maybe two units of housing,

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all the way up to 260 unit multifamily development. And then even things like the, like just last week

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we did the ribbon cutting for UPMC's new international vision and rehabilitation tower. So

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Duquesne University also has its new College of Osteopathic Medicine that's being constructed

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right now. They're doing a new 229 unit development. And then there's just a lot of housing

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being proposed that I'm including in our Uptown development pipeline. So there is

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a substantial amount of development happening and it's hard because, you know, as the person

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who manages the real estate development for this neighborhood that's in such a transition period,

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I go through the neighborhood and can see like it as a rendering where I can see the stuff being,

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you know, I know that's going to be there in the fall. I know that breaks down here

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and it's hard to tell that story because I can't get people into my head. So I did recently,

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and I will be launching this week, an interactive development pipeline map where people can see,

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highlight it, what's coming, what's been approved, and then click on it to learn more about the

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projects. So we are seeing a great deal of development. I'm happy to be a part of it.

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Derek, you talked about your pathway into development. Just to drill down a little bit

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and go back to that first development deal, could you kind of just go back and talk about,

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you know, the challenges that you had on that deal once you made up your mind you were going to kind

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of scale past, you know, a large investor and really go the path of the developer?

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Sure. So what we recognize is that, you know, in looking at individual projects,

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you know, they were small, but in aggregate, what we had done in aggregate was, you know, substantial

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and was equivalent to, you know, substantial projects. So we had to leverage those 100 units

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that I had done of, you know, duplexes, single families with the largest being a 20 unit,

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in addition to the weatherization where we weatherized over 900 homes. So I was able to

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leverage that from an experience perspective because, you know, that's always one of the

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biggest things is experience and then also being able to support the guarantee and liquidity

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requirements. That also gave me leverage because I had built a portfolio as it related to net worth.

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So I actually had a pretty good net worth and some experience that I could leverage.

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Where I was lacking was the ability to sign guarantees and also liquidity. But

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I spring boarded from there. We did our first LIHTC deal. We submitted in 2016, completed it in 2018

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and it was a 36 unit. It was a 9% LIHTC deal, Long-Cum-Housing Tax Credit deal,

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36 units ground up construction project, about a 12 and a half million dollar project. And

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our goal was, it was done in the Hill District, just up the road from Uptown. Our goal was to

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really to, you know, bridge a gap, but also kind of raise the bar as it related to affordable

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housing from a design perspective, energy efficiency perspective, as well as supportive services.

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But that was that first project that we were able to get completed. But we definitely faced a lot of

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challenges along the way. We worked with a development consultant. They were definitely

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helpful. But it was kind of that in addition to the experience we had and then we had to be creative

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as it related to meeting the liquidity and guarantee requirements. A lot of investors tried to

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force a partner on me and tried to force a partner kind of down our throat. But I remained

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resolute that, you know, we had come so far and we didn't need a partner. And we stayed true to that.

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That's amazing. And I know that's what some folks will want to focus on.

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Because, you know, early on, scalability has kind of been JV in your way with the partner who's

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going to take the majority of your developer fee, which is pretty much the profit motive in an

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affordable tax credit deal. How were you able to, I guess, work around the liquidity and the

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guarantees? Because they would actually be coming from requirements from PHFA, as well as I imagine

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the equity investors, you know, if you guys had any debt on it, you know, they also have their own

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guarantee requirements and network and liquidity. So that's a huge chunk. How were you able to do that?

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Sure. So it's complicated, but I'm going to try to give you a short version, you know, kind of a

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collective puzzle that we had to put together to do that. So the first was, as I go back to experience,

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I have rehab over 100 units. So I was able to list that as experience, whether it was over 900 homes,

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was able to list that as experience. So that was the first one. I had built that portfolio that,

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you know, me and my wife built over that time. So my net worth actually met the requirements from a

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net worth requirement. So those were kind of check check. They, you know, they were kind of

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checking me. So those were kind of check check. They, you know, still tried to pick at those things,

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but we were largely able to get past it with that as it related to. So when we put out, we wanted

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tax credits, we put it out for pricing and we were getting horrible pricing. This was before,

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you know, Trump. So this is when pricing was pretty much at an all time high. So we couldn't

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find an investor or we were getting whack pricing, or they were trying saying, we'll do your deal,

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but you have to partner with X. So we continue to put it out there to more and more investors.

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We were able to, through a relationship, stumble onto First National Bank, who's now building

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their corporate headquarters in the Hill district. But this was early on when they had, they had

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purchased a bank locally. They had a huge CRA need and they really needed me just as much as I

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needed them. So we were able to align ourselves. And typically you have a syndicator that finds

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your investor. In my case, my syndicators weren't really finding me investors other than, and the

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ones that were saying he has to partner. So we actually found our own investor just through

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personal relationships and that ended up being huge for us. So I negotiated our pricing directly

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with the investor and I was trying to get them to do the deal direct to essentially eliminate

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the syndicator and not have as many folks I have to answer to. But because they were new to the

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world of LIHTC, they weren't in a position where they could do it direct. So they were saying we

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needed to work with a syndicator or they needed to work with the syndicator. And they asked if we

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hadn't been talking to anyone. And I said, yeah, there were a few. One seemed to want to do the

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deal a lot and they said they could provide us with pre-development capital, which turned out to

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not be true. So we ended up bringing them into the deal. And they caused me a lot of heartburn

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as the time went on. Even though we brought them into the deal, things were seeming to progress.

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And then we kind of came to a crossroads where the deal was halted. We came to an impasse,

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they were trying to force us to do something that we weren't comfortable with. And we were at an

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impasse. I actually met another black developer at the Pennsylvania Housing Alliance Conference.

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And we started to talk about our deals. And we shared each other's LOIs. And what I noticed was

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there were components where they were requiring a lot more liquidity from me and less

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liquidity from him, or a lot more net worth from him and less net worth from me. So we actually

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used each other's LOIs to then go back and negotiate with our syndicator. It was funny

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because the syndicator I was working with saw us talking at the conference. And it was almost like

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he saw a ghost. And we went back and that actually, it was almost like iron sharpening iron. So we were

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able to use that. And then kind of fast forward, they decided to go ahead and move forward with

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their deal despite the impasse we had been at for some time. How we overcame the guarantee requirement

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is that we got our construction company to sign a construction completion guarantee. It was a large

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construction, billion dollar construction company. So essentially we leveraged their balance through

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completion. And then that guarantee fell off at completion. And basically my developer fee,

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our portion of it was intended to stay in until stabilization. So that was our secret sauce.

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Of course I signed the guarantee, but that wasn't what was really holding the weight. It was the

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strength of the general contractor in addition to ours, coupled with the experience I had,

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coupled with the net worth that I had that all kind of collectively fit all those puzzle pieces

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to get us over the finish line. I'm glad to hear that because people, I mean, always tell me the

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alternative of getting the contractor to come in and guarantee the completion. And I've yet to

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really hear a deal where that totally worked. Did they want a large guarantee fee for that or just

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a modest fee to do it? I'm sure they probably requested something in exchange for the guarantee.

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No. So I had come from the, I had sold real estate as an agent,

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residentially and commercially. So I really came from a negotiation background. And my

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perspective was you're getting the GC fee. I'm bringing you into this job. You're making money

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on that side. This is how I make money. So I felt like the carrot was enough with the fee on

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construction. So that's what we landed on. So I didn't have to pay them any additional monies

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to put that forth because they already were signing a lump sum contract. So it really wasn't,

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at least from my perspective, much more than what they were already signing and providing.

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It was just, you have to finish the construction and then this falls off and essentially you get

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all of your fee. So we negotiated in a way that it didn't cost us any additional funds.

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But I do know that there's GCs that essentially try to require more. I think you have to stick

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to your guns and understand that you already have leverage with the construction contract as it is.

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Wow. Good stuff. Derek, you mentioned that you worked with your wife. What's that like?

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Yeah. So we had a separate company that was doing property management as well as kind of managing

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our own portfolio. And she was working with me doing some administration and some things early on.

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And it was fine early, but she didn't really like it, didn't have a love for the business.

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And I always knew it was going to be short-term and she knew it was going to be short-term as well.

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But then we started to have children and decided that she would be a stay-at-home mom for a period.

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So it was really during that time where she transitioned out and we kind of took things

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forward from there. So it served a purpose for a period because we couldn't afford to pay anyone

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at that point. But it was, I don't think it was ever intended to be long-term.

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Gotcha. And you still have your own property management business?

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No. As time went on, I realized that was the least part of the business that I liked.

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And we probably still manage a few little small units, but largely we've transitioned everything

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over to a third-party management firm. All of our tax credit deals, everything we're doing

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that's in our pipeline now is going to be with the property management firm. And I'm selling,

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sold most of the smaller portfolio that we started with. So eventually, that'll either be sold or

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transferred over as well. But we're not really doing any property management these days.

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Okay. So I know everything, every deal was different. And you mentioned the challenges

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that you kind of had to work through on your first deal. Do any of these challenges still exist

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today? Because I have developers telling me that particularly the challenge of guarantee and

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network and liquidity, obviously they're on every deal, but there seem to be challenges on every

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deal that the folks I talked to end up overcoming. How's that worked for you with some of the deals

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you do today? You're still finding the same challenges? We are. And largely because even

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though we were able to get that deal done, at every stage, my developer fee was always kind of

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held hostage no matter what it was. So by the time we finally got it, it was so kind of diluted down

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over a period. We had to kind of borrow money to get to the next phase that when we got it,

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we were kind of paying back the bridge loan that we got. So it positioned us to move forward

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from an experience perspective, but not really from a liquidity or wealth building perspective.

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So we moved forward and today, pre-development, it costs hundreds of thousands of dollars to move

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a deal from conception to completion, or even from conception to construction start. So pre-development

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remains a challenge, especially if you're doing multiple deals. The guarantees still remain a

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challenge, as well as the liquidity requirement has actually increased. So we're having to be

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creative by finding CDFIs locally, nationally, or syndicators or investors that have platforms

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and programs set up to help minority developers. Enterprise being a good one that we've been able

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to connect with their equitable path forward fund. So we have to basically kind of scour the nation

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and find things that align with what we're trying to do to help us with various components of the

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deal. The other is to find lenders that have more creative terms, whether that be interest rate or

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cash flow loans, soft loans that really help deals work. That's kind of another thing.

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And then unfortunately, I can't just be a developer. I also have to be a leader as it relates to policy.

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So we are advocating for things like the Pennsylvania Opportunity Developer Fund

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that PHFA is working to institute. So that, but then there's other resources locally,

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as well as at the state level, really advocating, pushing, helping to design new platforms

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to really help aid minority developers with their deals, whether that is pre-dev, gap financing,

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soft loans, or equity, because largely the equity market is not available to us. There was a New

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York Times article that was published a few, maybe a month or so ago, that said out of $82 trillion

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nationally, trillion with the T, less than 1.3% goes to Black and Brown developers. And actually

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that number includes women. So 98.7% of $82 trillion goes to white men. So basically the equity

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market is not there for us. So it's all these different things that exist locally, nationally,

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that we have to tap into to help us as we move forward.

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It's interesting enough, Kerber and I, we did a National Equity Fund last week, and they also have

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a fund for Black and Brown developers. Of course, they're syndicators. And the idea is great. They

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do a guarantee stop, meaning they'll guarantee completion, but you have to have an allocation

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because obviously, you know, they're syndicators and that's what they do. And it's kind of like

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the chicken and egg, to get the allocation, a small or starting out developer run into what you just

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talked about, the guarantees, the liquidity, the net worth, the experience. So a lot of those

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developers can't even get to the allocation to take advantage of what, you know, NEF is doing.

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It sounds like something that you might even be able to take advantage of since you've been

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successful in getting allocation, but interesting that you bring that up.

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Absolutely. Absolutely. Let me just ask, go ahead, Kerber.

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Sabrina, given what you're doing in Uptown Hill District, what's kind of a pitch where

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you're telling developers to try to lure them into doing work in your community? Are you looking

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for primary local developers or are you also soliciting out of town developers to look at

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your, you're a partner of Pittsburgh? Yeah, so I've kind of recently, over the last maybe

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six months, switched my strategy in terms of actually not just being on the receiving end

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of developers saying they want to invest in, just because of the way some of the policy in the city

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is set up for registered community organizations like ours, developers have a responsibility

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and a requirement to engage with community groups. But I know the neighborhood so much and what's

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going on because I'm so intimately tied to everything that's happening here that over the

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last six months I sort of switched gears and instead of being on the receiving end, like

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of just vetting developments that come to us, as I had mentioned, but now shifting and going to

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court that development based on the things that I know. So, you know, Uptown is so unique and we

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have some of the more recognizable and larger stakeholders in the region and state located

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right here in our neighborhood from Duquesne University and we have a national hockey league

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team by way of the Penguins and UPMC, as I mentioned before, and their new international

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hospital. Just some of our utility companies have a strong footprint and visible structures that are

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coming up here and then we have that transportation and mobility piece, and we have a lot of

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utility companies that are going to be able to get that

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utility piece through the new bus rapid transit system that'll be going into Uptown over the next

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about year, year and a half. And so oftentimes you're talking to like right now I really want to

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core life sciences, more life science companies into the neighborhood to add that industry

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component and create like a hub here, especially since we're so closely located to Oakland that

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they're doing with the innovation district there. It's a make sense place to want to start to

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establish especially as we see the housing. What is the innovation district? So there's

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innovation district program that's happening in Oakland but Uptown is also the, is touted as

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being the world's first eco innovation district. Okay. So I want to build off of that, like where

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is the innovation part of that in conjunction with all the other assets that I just named that are

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real draws to industry and new businesses and startups and also just people who want to be in

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the next neighborhood. So some of our neighborhoods are pretty much complete. We think about the strip

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district and Lawrenceville and Oakland and downtown with its challenges and Southside with its like

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this Uptown is not what's next is what's happening. And so telling that story is

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an understanding development is a way that I'm starting to want to put together this thing about

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how do I go and seek that? I know what the needs are. I know what the concerns are. How do I go

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and seek that? And I think one of the, another component that I've been glad that I've been

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leaning into more is that there is a community perspective and desires for certain types of

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developments and affordability components. But then there's also, as Derek was mentioning earlier,

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there are some challenges that I think community groups must understand when it comes to trying to

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leverage givebacks from development. So understanding construction costs and interest rates and

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some of the obstacles faced when trying to put affordable units into a project, when affordable

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units cost the same much to develop as a market unit. I think it positions community groups to

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speak from a place of experience and knowledge, whereas they can be more partnerships and more

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so of an ask and a give type relationship. And so that is where I'm at right now. And I've really

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been leaning into just understanding the developer standpoint so that I can advocate for the

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neighborhood that I work for even better. And the Uptown Hill District is pretty walkable.

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How are you thinking about your retail strategy? So most of the developments that have come through,

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at least four of them, they've allowed me to embed myself on their projects because I'm able to

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help them understand the landscape, entry points, pairing them with affordability consultants like

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Steve to talk about this is a market development. What are some alternative strategies to

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putting affordability into my project? That's an example. Because of that relationship and that

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trust building and me creating myself as a resource while still standing firm on what the

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community's values are. A few of these products have allowed me to embed myself onto them. And

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so I know what some of the things are that we need. So for one of our projects, it'll have 6,600

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square feet of retail space. We've worked out informal, but definitive agreements around

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a grocer being put into that space. And the Hill District being commonly known as a food desert,

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we'll see another market go in at some point in the upper neighborhood of the Hill District. But

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we're also slated to see that same type of investment. So I can identify a concern.

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I can understand the solution based on that concern and then kind of gear them towards what

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to fill that retail space with. And another property that's going to have 12,000 square feet

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of retail space, a block size development by Alpha Residential. It'll have that 12,000 square

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feet of retail space. And one thing when you start to think about a development, it's that there's

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the design components that are really important. There's the retail that's important, how

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accessible it is, the units are to people from a range of different incomes. All those things are

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important. But when you're placing that building into a neighborhood, it needs to connect with

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the neighborhood. And so with the Alpha project, I really spoke to them about like,

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early on, the building doesn't feel to connect. We got to this really great point where it does,

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and that's because it didn't have a theme or a soul to it. How does this tie into the neighborhood?

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And so health and wellness in conjunction with the bus rapid transit system and the bike lanes that

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come from that, their retail space is currently going to be focused around that component and

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elevating that in the neighborhood. And because I've been able to, so I've been pairing them with

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property management and businesses that would be a great fit, specifically minority and black owned

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businesses as well. So it's being an asset, I think, and creating that partnership, that is part

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of the retail strategy. And also just getting a hold of these blighted and abandoned commercial

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structures that line our corridors on Fifth and Forbes and figuring out productive ways of reuse,

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contacting the owners, figuring out if conservatorship is the right tool, understanding

390
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people who want to buy and getting them in contact with the owners, those types of things. So this

391
00:42:50,480 --> 00:42:53,680
is whole thing that when it comes to community development, these different components, but it's

392
00:42:53,680 --> 00:42:58,000
really about strategic and intentional partnerships. And being close to universities and student

393
00:42:58,000 --> 00:43:09,520
housing part of the plan at all? Yeah. So another master plan called for about 630 units of student

394
00:43:09,520 --> 00:43:14,000
housing in order to offset, you know, some of the needs and strains from students who

395
00:43:14,000 --> 00:43:17,440
need to live in the neighborhood to be close to the university, but it can be a strain on our

396
00:43:17,440 --> 00:43:23,440
residential cores. In Uptown, partners will have been partnered directly on projects that have met

397
00:43:23,440 --> 00:43:29,200
that five-year timeline to do such. So Duquesne University will be building, is building a new

398
00:43:29,200 --> 00:43:38,240
229 unit dormitory, a collaboration with Fountain Development that'll be doing two separate buildings,

399
00:43:38,240 --> 00:43:45,360
one complex. They'll be bringing 260 units. And then some of the other, you know, smaller 51 unit

400
00:43:45,360 --> 00:43:52,320
market rate developments have lent themselves to students. And so those are almost at 100% capacity.

401
00:43:52,320 --> 00:43:59,760
And so we'll reach that 630 units of student housing or housing that targets students or entry

402
00:43:59,760 --> 00:44:05,360
level workforce within that fifth-year mark if we exclude some of the time lost with the

403
00:44:05,360 --> 00:44:11,760
pandemic effects. And these are mostly local developers? No, it's a mix of local and out of state.

404
00:44:11,760 --> 00:44:20,240
Okay, gotcha. Just out of curiosity, you know, this could be Derek or Sabrina, does the city of Pittsburgh

405
00:44:20,240 --> 00:44:26,000
really offer incentives for affordability? I know it seems like for the Uptown District,

406
00:44:26,000 --> 00:44:31,840
inclusionary zoning is not one of the things that they actually offer or sounds like not even

407
00:44:31,840 --> 00:44:40,720
say real estate tax abatement, but that just for the Uptown District or does, are there other sections

408
00:44:40,720 --> 00:44:47,040
of the city where, you know, these tools are used by the city or they just don't do it citywide in terms of incentives?

409
00:44:50,800 --> 00:44:56,640
So there are no requirements for affordability in the city of Pittsburgh. I mean, there are some

410
00:44:56,640 --> 00:45:04,160
neighborhoods that are, I would say, piloting inclusionary zoning, but there, I mean, I think

411
00:45:04,880 --> 00:45:10,080
for us, there are no, there's no requirements and I think that's what makes it, and

412
00:45:11,520 --> 00:45:17,360
that makes it tough for us to make these requests from market rate developers to instill affordability

413
00:45:17,360 --> 00:45:23,040
into the projects when there aren't really, I think, streamlined ways to access incentives.

414
00:45:23,040 --> 00:45:30,560
But I think Derek would be great at speaking to that specifically.

415
00:45:30,560 --> 00:45:36,720
Yeah, just to piggyback on that, there's only one neighborhood that has an inclusionary zoning overlay

416
00:45:37,520 --> 00:45:44,320
and that's Lawrenceville. It's a 10% requirement, but that's, you know, pretty much, it's a neighborhood

417
00:45:44,320 --> 00:45:51,200
that's been gentrified. It's pretty much 100% market rate at this point, so they kind of had to do it,

418
00:45:51,200 --> 00:45:56,880
but there's nothing like that that exists in any other part of the city of Pittsburgh. As far as

419
00:45:56,880 --> 00:46:03,840
other incentives, like as far as financing, gap financing, the URA has some programs, so they have

420
00:46:03,840 --> 00:46:09,760
a housing opportunity fund that gives out $10 million a year to help preserve and create more

421
00:46:09,760 --> 00:46:16,560
affordable housing, but only $4 million, about $4 million of that per year goes into gap financing

422
00:46:16,560 --> 00:46:21,360
of affordable housing deals. The rest of it's for like, you know, down payment and closing cost

423
00:46:21,360 --> 00:46:28,960
assistance for new home buyers and other forms of support. So it's just merely not enough.

424
00:46:28,960 --> 00:46:36,720
There are a few million, in addition to that, at home dollars that the city or URA gives out,

425
00:46:37,840 --> 00:46:43,360
but again, we have a close to 20,000 unit affordable housing crisis.

426
00:46:43,360 --> 00:46:52,240
So although the gap financing that is a part of kind of the URA's budget is helpful,

427
00:46:52,800 --> 00:47:00,000
it's not meeting the current demand. The housing authority is largely tasked with doing this,

428
00:47:00,640 --> 00:47:05,760
and you know, they're not meeting it solely either. They do have some gap financing

429
00:47:06,480 --> 00:47:10,400
available that you can apply for. It's RFP released every year.

430
00:47:10,400 --> 00:47:18,800
And it's basically a project-based voucher and gap financing RFP. So this has also been another

431
00:47:18,800 --> 00:47:27,760
helpful tool. But part of the problem is none of these things are aligned. You get one, but then

432
00:47:27,760 --> 00:47:35,760
you still have a gap, and then you may not get the other one. So the misalignment is really hurting

433
00:47:35,760 --> 00:47:42,560
us and it's really hurting our city. But in addition to that, we need a lot more resources

434
00:47:42,560 --> 00:47:49,120
than was currently available. Yeah, I hear you. At least you get project-based vouchers. They

435
00:47:49,120 --> 00:47:56,000
don't even offer that in Philadelphia, which really makes it tough. But I guess we'll go in

436
00:47:56,000 --> 00:48:02,640
and start looking kind of looking forward, starting with Debra. In terms of how many units

437
00:48:02,640 --> 00:48:07,920
you have now, what are you looking to do in terms of scaling your business? And at some point,

438
00:48:07,920 --> 00:48:14,240
if you haven't already, are you going to move beyond the Pittsburgh geographic?

439
00:48:15,760 --> 00:48:23,600
Sure. So we have quite a bit of deals in the pipeline slated to start construction this year

440
00:48:23,600 --> 00:48:29,680
and then several others in subsequent years. But I'll just mention a few.

441
00:48:29,680 --> 00:48:39,200
So we're working on a project right in Uptown in the neighborhood that Sabrina does her work.

442
00:48:39,200 --> 00:48:46,800
And it is a very important corridor known as Fifth and Dimwitty where we're developing both

443
00:48:46,800 --> 00:48:55,920
sides of the street. So one side is an office building. So 20,000 square foot adaptive reuse

444
00:48:55,920 --> 00:49:02,080
of an existing building. And then we're adding a 20,000 square foot addition. So it's a 40,000

445
00:49:02,080 --> 00:49:07,120
square foot building. We'll include office space, co-working space for small businesses.

446
00:49:07,760 --> 00:49:15,520
We're slated to have a coffee shop. And then we're also thinking about that economy that

447
00:49:15,520 --> 00:49:20,400
Sabrina talked about. We're doing a training center focused on clean energy jobs.

448
00:49:20,400 --> 00:49:26,560
So teaching folks how to install solar panels, EV charging stations, et cetera.

449
00:49:26,560 --> 00:49:32,640
Directly, and that's a new market tax credit deal, directly across the street from that,

450
00:49:32,640 --> 00:49:42,640
we're building 171 units, mixed income housing. A minimum of 50% will be affordable.

451
00:49:42,640 --> 00:49:49,600
It's two buildings connected by a sky bridge, but it also in building one also has 12,000

452
00:49:49,600 --> 00:49:57,360
square feet of retail. So it's a very complicated deal, condo structure, et cetera. Just up the

453
00:49:57,360 --> 00:50:04,320
road, actually across the street from our other latex deal, we're renovating adaptive reuse of

454
00:50:04,320 --> 00:50:14,080
a former school, the former Miller School, which will be 41 units. This is an 80-20 deal, 80%

455
00:50:14,080 --> 00:50:21,280
market, 20% affordable. So just a few things. Again, there's other things in our pipeline,

456
00:50:21,280 --> 00:50:29,920
but those are our priority projects for this year. We definitely have been invited to participate in

457
00:50:29,920 --> 00:50:37,440
some other markets. One that I'll mention is where Sabrina comes from, Detroit. So we've been

458
00:50:37,440 --> 00:50:44,720
talking to some folks about doing some things there. I do have interest in the DMV, but I think

459
00:50:46,720 --> 00:50:54,400
again, others, we've had conversation in other states, but the one that we're looking hard at

460
00:50:54,400 --> 00:51:00,560
actually doing something outside of Pittsburgh or even Allegheny County most likely will be Detroit

461
00:51:00,560 --> 00:51:08,240
first, but we got a pretty healthy pipeline here in Pittsburgh.

462
00:51:08,880 --> 00:51:09,840
Why Detroit there?

463
00:51:12,000 --> 00:51:20,000
One, we have some grassroots relationships with some people there on the ground.

464
00:51:20,000 --> 00:51:28,800
There was a need. We were able to bring our vision as it relates to bridging gaps,

465
00:51:28,800 --> 00:51:36,480
bridging gaps of opportunity and bridging gaps in development. Through that relationship on the

466
00:51:36,480 --> 00:51:43,200
ground, we've been talking about being able to bring our work and our services there.

467
00:51:43,200 --> 00:51:49,760
In addition to some of the folks that we work with locally also have offices

468
00:51:50,400 --> 00:52:00,560
in several markets, but one includes Detroit. They seem to be minority developer friendly,

469
00:52:00,560 --> 00:52:06,480
so not just developer friendly, but minority developer friendly. Those are some of the things

470
00:52:06,480 --> 00:52:12,880
that we've been able to bring to Detroit. We've been able to bring in some of the folks

471
00:52:12,880 --> 00:52:20,080
that we look for before actually moving on opportunity in another market.

472
00:52:20,080 --> 00:52:26,320
If you had to start over again, go on the path for development, is there anything

473
00:52:27,120 --> 00:52:28,080
you would do differently?

474
00:52:29,200 --> 00:52:38,400
Actually, I would not. The challenges that we had to overcome forced me to be more creative.

475
00:52:38,400 --> 00:52:47,920
It also forced me to think about things in ways that just being able to throw money at it,

476
00:52:47,920 --> 00:52:56,400
I would not have been as well versed and versatile. Also, we don't just do affordable,

477
00:52:56,400 --> 00:53:04,160
we do affordable market rate commercial. Because of that, even if there's a down market,

478
00:53:04,160 --> 00:53:09,040
just say for example, a market rate, we can focus on more affordable.

479
00:53:10,000 --> 00:53:14,800
I wouldn't change anything, but as far as what I would change going forward,

480
00:53:15,440 --> 00:53:24,880
it's having a major fund in every state available for just minority developers,

481
00:53:24,880 --> 00:53:34,880
as well as a federal fund that's available for minority developers nationally. These funds being

482
00:53:34,880 --> 00:53:42,000
able to be used in the form of equity, pre-dev, gap financing, soft funds, whatever your deal needs,

483
00:53:42,000 --> 00:53:47,280
that's what I would change going forward. But as far as my path, I wouldn't change anything.

484
00:53:47,280 --> 00:53:47,920
Sounds good.

485
00:53:47,920 --> 00:53:55,440
Yes. What are your goals? We'll let the term come and wrap it up. Do you have any desire to break

486
00:53:55,440 --> 00:54:00,160
into development yourself or just what are your goals for yourself as well as the district?

487
00:54:00,720 --> 00:54:07,120
All paths that I've been following since I came here have all started with something to do with

488
00:54:07,120 --> 00:54:12,560
real estate from when I wrote the conservatorship law to where I am now, working very closely with

489
00:54:12,560 --> 00:54:18,080
developers and identifying opportunities and addressing some challenges that have to do with

490
00:54:19,520 --> 00:54:24,480
real estate development as it pertains to uptown. Every path, even in the residential general

491
00:54:24,480 --> 00:54:29,760
contracting business that we have, all things have to do with development. I think I'm already in it.

492
00:54:29,760 --> 00:54:37,360
What does it look like moving forward? I just want to see how this unravels. I really am interested

493
00:54:37,360 --> 00:54:42,640
in the relationship part of it, connecting the dots, getting people to the point where the development

494
00:54:42,640 --> 00:54:51,920
comes up. I think that is a good lane for me, at least in this moment right now, to help streamline,

495
00:54:51,920 --> 00:54:59,040
provide resources, get developers to understand the community perspective, educate community groups

496
00:54:59,040 --> 00:55:04,560
on the developer perspective, keep making those strategic partnerships and connections, and to see

497
00:55:04,560 --> 00:55:10,160
this stuff happen more quickly and still responsibly. I'm in a great space right now.

498
00:55:12,160 --> 00:55:18,560
But anything can happen. I'm really enjoying learning the developer perspective right now.

499
00:55:19,120 --> 00:55:25,040
Sounds good. I guess if you... This pathway, and I actually have to get to Pittsburgh.

500
00:55:26,560 --> 00:55:31,600
We were talking before. I went to Indiana University of Pennsylvania. I've been to the hill,

501
00:55:31,600 --> 00:55:37,360
had friends there, but certainly that's been many years. If you could project out five years,

502
00:55:38,960 --> 00:55:45,680
the Uptown Hill District from, I guess, a perspective of five years out compared to what it is now.

503
00:55:45,680 --> 00:55:52,720
Yeah, so with Uptown specifically, I think Uptown is the catalyst for change in the hill district.

504
00:55:52,720 --> 00:55:57,440
I think just the way that Uptown Partners has pivoted and become partners of other community

505
00:55:57,440 --> 00:56:04,000
groups in the hill and getting to know people and get our story out and really

506
00:56:04,640 --> 00:56:10,320
telling around those assets that are integral to, I think, Pittsburgh's growth, just that transit and

507
00:56:10,320 --> 00:56:17,440
the medicine, education, the housing, the retail, all those things that are in our pipeline, I think,

508
00:56:17,440 --> 00:56:21,440
will be the catalyst for change that the hill district has desperately needed for quite some time.

509
00:56:21,440 --> 00:56:27,440
Then there are other significant projects happening in the lower hill as well that I think

510
00:56:27,440 --> 00:56:33,200
play off of one another. In five years, I expect this to be a population, specifically in this

511
00:56:33,200 --> 00:56:38,960
neighborhood, that's probably triple due to the housing that's coming here. But I see it as one of

512
00:56:38,960 --> 00:56:49,040
the... I see Uptown as one of the integral parts of Pittsburgh and with people and

513
00:56:49,040 --> 00:56:57,760
foot traffic and an identity that's clear to people. I see that and I see tech here and

514
00:56:57,760 --> 00:57:03,920
it making sense about life sciences and why it's in this neighborhood. I'm hoping that

515
00:57:03,920 --> 00:57:08,000
there's more opportunities for equity. We talk about affordable housing and the units.

516
00:57:08,000 --> 00:57:13,520
I'm really hoping that there are opportunities for entrepreneurship and getting into some of these

517
00:57:13,520 --> 00:57:19,040
blighted and bank it structures, commercial structures. I've been having those conversations

518
00:57:19,040 --> 00:57:25,440
as early as this morning, what that looks like, and more ownership of the neighborhood in a

519
00:57:25,440 --> 00:57:30,640
responsible way. Avoiding some of the mistakes that I think happened as communities started to

520
00:57:30,640 --> 00:57:35,200
see investment and really there was no model to look for how to do that responsibly. Doing this

521
00:57:35,200 --> 00:57:40,960
in a great way, especially as we see all this market rate. More housing, more innovation,

522
00:57:40,960 --> 00:57:46,080
more industry, more people, and more acknowledgement about how Uptown is that puzzle piece that's going

523
00:57:46,080 --> 00:57:52,000
to help connect downtown Oakland and the Upper Hill neighborhoods. That's what I see. That's my vision

524
00:57:52,640 --> 00:57:58,240
and it's happening. That's awesome. I think what you just laid out really lends itself to a really

525
00:57:58,240 --> 00:58:04,400
vibrant community. I think what Marimba is doing too in the Hill District, it just adds to that.

526
00:58:04,400 --> 00:58:10,720
I think it's going to be Pittsburgh's going to look differently in the next couple of years. I

527
00:58:10,720 --> 00:58:14,080
think with the anchors that are already there, Carnegie Ballot, University of Pittsburgh,

528
00:58:14,080 --> 00:58:21,680
Strip District, PNC, FMB, you've got the sports teams within walking distance here to your

529
00:58:21,680 --> 00:58:25,680
neighborhood. It's really attractive for tech companies, I think like you mentioned before,

530
00:58:26,320 --> 00:58:31,040
and for larger companies to move in because you get the talent space there and just you got quality

531
00:58:31,040 --> 00:58:37,840
housing for your employees. It really makes it a real attractive city to be in. I'm glad that you

532
00:58:37,840 --> 00:58:42,960
guys are the forefront of that. What's some ways that developers can get in contact with you if they

533
00:58:42,960 --> 00:58:49,920
are interested in Pittsburgh and want to explore some opportunities? I can be reached at

534
00:58:49,920 --> 00:58:56,640
smiller at UptownPartners.org. I'm happy to have those conversations. And the interactive map is

535
00:58:56,640 --> 00:59:02,400
going to be on your website? Yes, it will be on our website and then on my LinkedIn and on the

536
00:59:02,400 --> 00:59:07,280
Uptown Partners platforms as well. I'll be pushing it out there as well. And Derek, I know a lot of

537
00:59:07,280 --> 00:59:11,520
the syndicators and direct investors are probably interested in talking to you going forward.

538
00:59:12,160 --> 00:59:14,960
Should they just reach out to you via the information on your website as well?

539
00:59:16,320 --> 00:59:23,840
Yes, they can reach out to me on my website, LinkedIn, or via email at DT.com.

540
00:59:23,840 --> 00:59:33,760
Or via email at Detailman at BTGdevelopment.net. They can find me. All right. Awesome. Thanks,

541
00:59:33,760 --> 00:59:39,520
guys. Thanks for the good time. Steve, got anything to say? No, absolutely. Appreciate you guys

542
00:59:39,520 --> 00:59:46,080
joining. I will say for Sabrina, regarding the life sciences, Philadelphia basically leveraged

543
00:59:46,080 --> 00:59:52,000
University of Penn and Drexel University. And they literally created the life science industry

544
00:59:52,000 --> 00:59:56,880
in Philly, which is a top 10 industry. And it's actually the only real thing going in terms of

545
00:59:56,880 --> 01:00:02,560
commercial real estate in the city. And I know you guys have great universities there. And if

546
01:00:02,560 --> 01:00:09,120
they haven't started, they're definitely the folks to knock on their door. But glad both of you guys

547
01:00:09,120 --> 01:00:15,680
can join. We will be back in touch. And thanks for being on the shop. Another day at the shop.

548
01:00:15,680 --> 01:00:21,520
And content they can't get anywhere else.